BAE to add 500 shipyard jobs

This photo illustration by BAE Systems shows what its ship repair yard in Barrio Logan will look like with a large new floating dry dock (far left) and a full load of ships.

This photo illustration by BAE Systems shows what its ship repair yard in Barrio Logan will look like with a large new floating dry dock (far left) and a full load of ships. (BAE Systems San Diego Ship Repair)

BAE Systems plans to announce Friday that it will hire as many as 500 workers at its ship-repair yard in Barrio Logan, enabling the company to handle an expected boom in business during the next five years as the Navy shifts more warships to San Diego Bay.

The company also intends to announce that the ship yard will become home to one of the largest floating dry docks in the nation — a 950-foot vessel that’s being built in China and will be towed into San Diego Bay in late 2016. BAE Systems will spend about $100 million on the dry dock and related facilities.

Aaron Atencio

Aaron Atencio

It also has added a new service pier that will be dedicated on Friday, with executives from the company’s Virginia headquarters in town to celebrate the largest investments BAE has made in San Diego in years.

“We’ll be able to handle every ship that can fit under the (San Diego-Coronado Bridge),” said Bob Koerber, general manager of BAE Systems San Diego Ship Repair, which has 1,700 workers and 300 subcontractors.

BAE Systems operates one floating dry dock at its Barrio Logan site. So does a neighboring shipyard, General Dynamics-NASSCO. A third is being added because the Navy plans to boost the number of warships homeported in San Diego to about 79 — from the current 60 — over the coming years. It’s part of the “Pacific Pivot,” a plan by the Pentagon to base more ships on the West Coast, where they can be quickly deployed to the Middle East and Asia.

“Having only two dry docks for close to 80 ships doesn’t meet the needs of the Navy,” Koerber said.

The improvements at BAE Systems come at a critical time and place, said Eric Wertheim, a defense analyst for the U.S. Naval Institute, an independent think tank in Annapolis, Md.

“San Diego plays a key role in the military’s shift to the Pacific because it is the largest naval base on the U.S. West Coast,” Wertheim said. “The Navy and Marine Corps face increasing challenges as nations develop more advanced anti-access and area-denial capabilities designed to reduce our influence, and intend to halt our ability to aid our allies and operate there in the event of hostilities.”

Naval vessels homeported in San Diego include amphibious assault ships, 844-foot “mini-carriers” that carry troops, jets and helicopters. The ships are too large to fit into BAE Systems’ existing dry dock, but they’ll easily glide into the new dry dock. So will large Navy auxiliary ships and private cruise ships.

The investment could help the company’s bottom line.

It’s not unusual for the Navy to spend $70 million to $100 million to overhaul amphibious assault ships. BAE will soon be able to bid on those repair contracts.

Navy officials also are talking about spending as much as $350 million to modernize its Ticonderoga-class cruisers, powerful ships that are used to provide air defense for aircraft carriers. BAE will have more room for such vessels; it’s increasing its ship capacity from four to seven.

In addition, it’s likely that the naval fleet would expand in coming years, which analysts said would translate to more ship-repair contracts over the long term.

On March 12, Navy Secretary Ray Mabus told the Senate Committee on Armed Services that he expects the fleet to grow from about 275 ships today to 300 or so by 2020. Mabus said he was “committed, to the maximum extent possible, to preserve ship construction and to seek reductions in every other area first, should further budget reductions such as sequestration become reality.”

The construction schedule includes everything from littoral combat ships — vessels that are being introduced to the fleet in San Diego — to destroyers to possibly more of the Mobile Landing Platform ships that have been constructed by NASSCO.

Sean Stackley — assistant secretary of the Navy for research, development and acquisition — has said the military is trying to ensure that more construction contracts go to NASSCO so it can maintain its industrial base on the West Coast. NASSCO runs the largest shipyard on this side of the country.

BAE Systems doesn’t build warships in California, but it strongly markets its naval and commercial repair services in San Diego. Erwin Bieber, president of BAE Systems Platforms & Services, which includes the company’s shipyards, said he recently briefed the Navy about the BAE upgrades in San Diego.

“This means (the Navy) can bring the ships in when they want to. They don’t have to bring them to other locations,” Bieber said. “It supports their ‘(Pacific) Pivot’ strategy.”

Bieber downplayed the idea that the new dry dock and additional pier facilities would make the company more competitive with NASSCO.

“We will have more capacity, but certainly the Navy demand is growing as well,” Bieber said. “ It is not a matter of squeezing somebody out. It is a matter of ensuring that we can support the additional ship availabilities that will be taking place on the West Coast.”

The Associated Press contributed to this report.

BAE SYSTEMS

Workforce: The company employs about 1,700 workers and roughly 300 subcontractors at its yard in Barrio Logan. BAE Systems Intelligence & Security employs approximately 1,100 people in Rancho Bernardo.

Ship repair: BAE Systems has ship repair yards in San Diego; San Francisco; Pearl Harbor; Mobile, Ala.; Jacksonville and Mayport, Fla., and Norfolk, Va. The Mobile and Jacksonville yards also perform some new construction work. Collectively, the seven yards did about $1.6 billion in business last year.

Barrio Logan yard: BAE Systems San Diego Ship Repair is located on San Diego Bay, along with the General Dynamics-NASSCO and Continental Marine shipyards. It’s a 17-acre facility that includes a floating dry dock known as the Pride of San Diego, which can lift 26,000 tons. The yard is set to add a 950-foot floating dry dock that can lift 55,000 tons. It will be the company’s largest dry dock in the U.S. when it enters service in 2017. BAE Systems also has just completed Pier 4, a 415-foot-long, 64-foot-wide pier.